28.03.2018 (The Edge Markets MY) - KUALA LUMPUR (March 28): Malaysian palm oil futures edged lower on Wednesday evening as the ringgit strengthened further and hit its highest in nearly two years.

The Malaysian currency rose as much as 0.53% against the dollar to 3.8550, its highest since April 2016, bolstered by high oil prices and portfolio inflows. It was last up 0.35% at 3.8620 per dollar on Wednesday evening for a third consecutive sessions of gains.

Gains in the ringgit, palm's currency of trade, usually weigh on the tropical oil by making it more expensive for holders of foreign currencies.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.5% at RM2,418 (US$626.10) a tonne at the close of trade in a second straight session of declines.

Palm fell to a one-week low of RM2,410 on Tuesday, and has been range-trading around RM2,400 in the last two weeks. It has shed over 5% so far this month in what may be its biggest monthly drop since November 2017.

Trading volumes stood at 26,955 lots of 25 tonnes each at the end of Wednesday's trading day.    

Palm oil is seen trading in a range in the medium term until data from the Malaysian Palm Oil Board is released on April 10, said a futures trader from Kuala Lumpur.

"But it's hard to say (if March stocks will rise or fall on-month), as the surprise lies in exports ... and production," he said.  

Malaysian palm oil production is forecast to rise in March from a month earlier, in line with seasonal trend and on the higher number of working days.

Malaysia's central bank said on Wednesday it expected crude palm oil prices to decline this year due to elevated inventory levels post El Nino, a dry weather event from 2015 which damaged crops and lowered output.

Palm oil traders are also expecting exports to rise in March on a monthly basis. Shipments from Malaysia during March 1-25 rose 9% to 10% from the corresponding period in February, according to cargo surveyor data released earlier this week.

Malaysian exports had declined 13.3% on a monthly basis to 1.3 million tonnes in February.

In other related oils, the Chicago Board of Trade's May soybean oil contract fell 0.5%, while the May soybean oil on China's Dalian Commodity Exchange declined 0.6%.

The Dalian May palm oil contract was down 0.4%.

Palm oil prices are impacted by movements in rival edible oils as they compete in the global vegetable oils market.        

 

Palm, soy and crude oil prices as of 1044 GMT

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	APR8	2397	-3.00	2370	2403	221
MY PALM OIL	MAY8	2422	-12.00	2421	2430	2453
MY PALM OIL	JUN8	2417	-13.00	2417	2427	13604
CHINA PALM OLEIN	SEP8	5078	-12.00	5054	5094	206032
CHINA SOYOIL	SEP8	5792	-48.00	5772	5816	290836
CBOT SOY OIL	MAY8	31.42	-0.16	31.4	31.59	4801
INDIA PALM OIL	MAR8	638.30	-0.10	637.70	638.8	1260
INDIA SOYOIL	APR8	778.9	+2.80	773.6	781.85	10260
NYMEX CRUDE	MAY8	64.76	-0.49	64.38	64.98	108071

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel

(US$1 = RM3.8620)
(US$1 = 65.2650 Indian rupees)
(US$1 = 6.2900 Chinese yuan)